As NAGGL previously advised, the Continuing Resolution (CR) under which the government, including SBA, currently is operating expires on December 20 and the risk for a funding lapse has significantly increased. Therefore, lenders need to be prepared for the possibility of a government shutdown which could last for some time. By email sent to lenders on December 19, SBA provided guidance regarding the restrictions that will be imposed on Secondary Market sales if SBA funding lapses on December 20.
In accordance with the SBA message, if there is a government shutdown due to a lapse in funding after 11:59 pm ET on December 20, SBA 7(a) Secondary Market sale and pool formation processes will operate under the following parameters:
- “Settlement: A loan must be entered into the Settlement Express application within the SBA’s Capital Access Financial System (CAFS) and all completed sale documentation must be sent to the FTA’s [email protected] inbox prior to 5 PM ET on Friday, December 20, 2024, for the sale of a SBA 7(a) loan into the Secondary Market to continue. No exceptions will be provided to this deadline.”
- “Transfer (Detached Assignment): Assignees may continue to present SBA Form 1088, Secondary Market Assignment and Disclosure Form, and its related registered certificate for transfer to the FTA for SBA 7(a) Secondary Market Certificate Transfers. This includes Confirmation of Originator Fee transfers.”
- “Pooling: SBA 7(a) Pooling will follow the normal December 2024 pool formation calendar published on the FTA Wiki. January 2025 pooling may be suspended depending on the duration of the government shutdown. Upon restoration of appropriations and the resumption of orderly operations, an eligible pool formation calendar will be published.”
Monitor www.naggl.org and watch for messages from NAGGL for updates regarding the status of government funding and any possible shutdown.
